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11/29/2021

Minutes of November 2–3 FOMC meeting

The Federal Reserve Board and the Federal Open Market Committee on Wednesday released the minutes of the Committee meeting held on November 2–3, 2021.

11/29/2021

Fed Board releases Supervision and Regulation Report

The Federal Reserve Board has released its November 2021 Supervision and Regulation Report, which summarizes banking conditions and the Federal Reserve’s supervisory and regulatory activities, in conjunction with semiannual testimony before Congress by the Vice Chair for Supervision.

The current report focuses on the Federal Reserve’s regulatory and supervisory response to the “COVID event”—the economic and financial stresses resulting from the containment measures adopted in response to public health concerns.

11/29/2021

OCC reminder on investments in venture capital funds

The OCC has issued Bulletin 2021-54 to remind OCC-supervised banks and savings associations of restrictions on most equity investments in venture capital funds. The Bulletin includes these points:

  • Banks generally may not make passive equity investments in venture capital funds.
  • Equity investments in venture capital funds may be permissible if they are public welfare investments or investments in small business investment companies.
  • Qualifying for the Volcker rule's venture capital fund exclusion does not make a fund a permissible investment for a bank.
  • As with any investment, before a bank invests in a venture capital fund, the bank must determine whether the investment is permissible and appropriate for the bank.
  • Impermissible and inappropriate investments expose the bank and its institution-affiliated parties to enforcement actions and civil money penalties.
  • National bank directors may be personally liable for impermissible investments' losses.

11/29/2021

OFAC amends Syrian Sanctions Regulations, issues Venezuela-related license

On Friday, November 26, OFAC published a final rule amending the Syrian Sanctions Regulations (31 CFR Part 542) to expand an existing authorization related to certain activities of nongovernmental organizations (NGOs) in Syria. The amendments were effective on publication. OFAC also published two new related Frequently Asked Questions:

  • FAQ 937: What does the general license (GL) at § 542.516 of the Syrian Sanctions Regulations (SySR), as amended on November 26, 2021, authorize with respect to nongovernmental organizations (NGOs)?
  • FAQ 938: What early-recovery-related transactions and activities are nongovernmental organizations (NGOs) authorized to engage in pursuant to the general license (GL) at § 542.516 of the Syrian Sanctions Regulations (SySR), as amended on November 26, 2021?

OFAC also issued Venezuela-related General License 8I, "Authorizing Transactions Involving Petróleos de Venezuela, S.A. (PdVSA) Necessary for the Limited Maintenance of Essential Operations in Venezuela or the Wind Down of Operations in Venezuela for Certain Entities."

Related link:

11/24/2021

Large commercial banks third quarter assets

The Federal Reserve Board compiles quarterly data on domestically chartered insured commercial banks that have consolidated assets of $300 million or more and releases the data about twelve weeks after the end of each quarter. The data are obtained from the Consolidated Reports of Condition and Income filed quarterly by banks (FFIEC 031 and 041) and from other information in the Board's National Information Center database. Banks that are located in U.S. territories and possessions are not included in the table. At the end of the third quarter in 2021, there were 2,127 banks listed with total consolidated assets of $21.175 trillion and domestic assets of $19.258 trillion.

11/24/2021

2021 Do Not Call Registry Data Book

The Federal Trade Commission (FTC) has released the National Do Not Call Registry Data Book for Fiscal Year 2021. The FTC’s National Do Not Call (DNC) Registry lets consumers add their phone number and choose not to receive most legal telemarketing calls. In the last fiscal year, nearly three million people signed up with the DNC Registry, bringing the total close to 245 million phone numbers.

Now in its thirteenth year of publication, the Data Book also provides the most recent fiscal year information available on robocall complaints, the types of calls consumers reported to the FTC, and a complete state-by-state analysis. According to the Data Book, complaints about imposter calls again topped the list, with almost 594,000 received during the fiscal year ending on September 30, 2021, including both live calls and robocalls. In such calls, imposters falsely pose as government representatives, such as the Social Security Administration or the IRS, legitimate business entities, or as people affiliated with them.

11/24/2021

OCC clarifies bank cryptocurrency requirements and trust bank chartering

OCC Chief Counsel's Interpretive Letter #1179 has been published to confirm that national banks and federal savings associations must demonstrate that they have adequate controls in place before they can engage in certain cryptocurrency, distributed ledger, and stablecoin activities. The letter provides a roadmap for banks to engage with their supervisory office to provide written notification of their proposed activities and outlines the criteria that the OCC will follow to evaluate the proposed activity and provide a supervisory non-objection. If the bank receives a supervisory non-objection, the OCC will review these activities as part of its ordinary supervisory processes.

The interpretive letter also clarifies OCC standards for chartering National Trust Banks. The OCC may look to state law to determine if an applicant’s activities are limited to the operations “of a trust company and activities related thereto,” but an applicant’s activities will not automatically be deemed to be trust activities—or to be fiduciary activities—solely by virtue of state law. The OCC retains discretion to determine if an applicant’s activities that are considered trust or fiduciary activities under state law are considered trust or fiduciary activities for purposes of applicable federal law.

11/24/2021

Agencies' statement on crypto-asset initiatives

A Joint Statement on Crypto-Asset Policy Sprint Initiative and Next Steps was issued yesterday by the Federal Reserve, FDIC, and OCC to summarize their interagency "policy sprints" focused on crypto-assets and provide a roadmap of future work related to crypto-assets.. The statement describes the focus of the preliminary work conducted through the sprints undertaken by the agencies. It summarizes the agencies' plan to provide greater clarity throughout 2022 on whether certain crypto-related activities conducted by banking organizations are legally permissible, and related expectations for safety and soundness, consumer protection, and compliance with existing law and regulations. The emerging crypto-asset sector presents potential opportunities and risks to banking organizations, their customers, and the overall financial system. The interagency sprints quickly advanced and built on agencies' combined knowledge, which helped identify and assess key issues related to potential crypto-asset activities conducted by banking organizations. The focus of the sprint work included:

  • Developing a commonly understood vocabulary using consistent terms regarding the use of crypto-assets by banking organizations.
  • Identifying and assessing key risks, including those related to safety and soundness, consumer protection, and compliance, and considering legal permissibility related to potential crypto-asset activities conducted by banking organizations.
  • Analyzing the applicability of existing regulations and guidance and identifying areas that may benefit from additional clarification.

To place the sprint work in context, staff reviewed and analyzed a number of crypto-asset activities in which banking organizations may be interested in engaging including:

  • Crypto-asset custody.
  • Facilitation of customer purchases and sales of crypto-assets.
  • Loans collateralized by crypto-assets.
  • Activities involving payments, including stablecoins.
  • Activities that may result in the holding of crypto-assets on a banking organization’s balance sheet.

During 2022, the agencies plan to provide greater clarity on whether certain activities related to crypto-assets conducted by banking organizations are legally permissible, and expectations for safety and soundness, consumer protection, and compliance with existing laws and regulations related to:

  • Crypto-asset safekeeping and traditional custody services.
  • Ancillary custody services.
  • Facilitation of customer purchases and sales of crypto-assets.
  • Loans collateralized by crypto-assets.
  • Issuance and distribution of stablecoins.
  • Activities involving the holding of crypto-assets on balance sheet.

Related links:

11/23/2021

2021 CRA software downloads available

Version 2021 for the calendar year 2021 CRA data due March 1, 2022, is now available on the FFIEC's CRA/HMDA Software Downloads webpage. Each software version is year-specific (i.e. 2020 reporting requires 2020 CRA DES and not 2021 CRA DES).

11/23/2021

OFAC targets facilitator for ISIS-K

Yesterday, the Treasury Department announced that OFAC had designated Ismatullah Khalozai, an individual who has acted as a financial facilitator for the Islamic State’s Khorasan Province (ISIL-Khorasan), active in Afghanistan and commonly referred to as “ISIS-K.” This individual has provided support to ISIS-K’s operations in Afghanistan by facilitating international financial transactions that fund human trafficking networks and facilitating the movement of foreign fighters who seek to escalate tensions in Afghanistan and the region.

OFAC took this action in coordination with the U.S. Department of State, which yesterday designated Sanaullah Ghafari, Sultan Aziz Azam, and Maulawi Rajab as Specially Designated Global Terrorists (SDGTs) for their roles as leaders of ISIS-K.

For identification information on Khalozai and the individuals designated by the State Department, and other changes in OFAC's SDN List, see the BankersOnline OFAC Update for November 22, 2021.

11/23/2021

FHFA report on non-performing loan sales

The Federal Housing Finance Agency has released its latest report on the sale of non-performing loans (NPLs) by Fannie Mae and Freddie Mac (the Enterprises). The Enterprise Non-Performing Loan Sales Report includes sales information about NPLs sold through June 30, 2021. Borrower outcomes reflect NPLs reported through June 30, 2021 and sold through December 31, 2020.

The sale of NPLs reduces the number of delinquent loans in the Enterprises' portfolios and transfers credit risk to the private sector. FHFA and the Enterprises impose requirements on NPL buyers designed to achieve more favorable outcomes for borrowers than foreclosure.

The report shows that the Enterprises sold 130,808 NPLs with a total unpaid principal balance (UPB) of $24.5 billion from program inception in 2014 through June 30, 2021. The loans included in the NPL sales had an average delinquency of 2.9 years and an average current mark-to-market loan-to-value (LTV) ratio of 91 percent (not including capitalized arrearages).

11/23/2021

Powell and Brainard nominated for Fed Board top spots

The White House on Monday released remarks by President Biden announcing his nomination of Jerome H. Powell for a second term as Chair and Lael Brainard to take the position of Vice Chair of the Federal Reserve Board.

11/23/2021

HUD awards $3.6M for neighborhood revitalization

HUD has awarded a total of $3.6 million to eight communities to support comprehensive neighborhood revitalization plans to redevelop severely distressed HUD-assisted housing, improve outcomes for residents, and bring new amenities to neighborhoods.

Annapolis, Maryland; Augusta, Georgia; Brownsville, Texas; Jackson, Michigan; Las Vegas, Nevada; Los Angeles, California; McKees Rocks, Pennsylvania; and Richmond, Virginia are this year’s grant recipients. Each recipient is being awarded a grant amount of $450,000.

11/22/2021

SEC assesses $18M penalty for compliance failures

The Securities and Exchange Commission has announced that an affiliate of McKinsey & Company that offers investment options exclusively to current and former McKinsey partners and employees has agreed to pay an $18 million penalty for compliance failures.

The SEC’s order finds that the affiliate maintained inadequate policies and procedures to prevent McKinsey partners from misusing material nonpublic information they obtained as consultants to public companies and other McKinsey clients while they were simultaneously overseeing the affiliate’s investment decisions. The SEC’s order finds that McKinsey’s affiliate MIO Partners Inc. was investing hundreds of millions of dollars in companies that McKinsey was advising. Certain McKinsey partners oversaw MIO’s investment choices and also had access to material nonpublic information as a result of their McKinsey consulting work. These partners were routinely privy to confidential information like financial results, planned bankruptcy filings, mergers and acquisitions, product pipelines and funding efforts, and material changes in senior management at those companies.

According to the SEC’s order, MIO did not have reasonably designed policies and procedures to address the dual roles for McKinsey consultants who were involved in MIO’s investment choices. For example, the order cites an instance where a McKinsey partner’s access to confidential information about MIO’s investments in a company through a third-party manager created a risk that one of McKinsey’s units could influence the company’s Chapter 11 reorganization plan in a way that favored MIO’s investment.

The SEC’s order finds that MIO, which is a registered investment adviser and wholly-owned subsidiary of McKinsey, violated Sections 204A and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-7. Without admitting or denying the findings, MIO consented to the entry of a cease-and-desist order and a censure, and agreed to pay the $18 million penalty.

11/22/2021

SBA updates COVID EIDL guidance

The Small Business Administration has announced updated guidance for the COVID Economic Injury Disaster Loan (EIDL) program applicants to better serve small business owners in need, while funding remains available:

  • EIDL loan and Targeted Advance applications will be accepted until December 31 and will continue to be processed after this date until funds are exhausted.
  • Supplemental Targeted Advance applications will be accepted until December 31; however, the SBA may be unable to process some Supplemental Targeted Advance applications submitted near the December 31 deadline due to legal requirements. The SBA cannot continue to process Supplemental Targeted Advance applications after December 31 and strongly encourages eligible small businesses to apply by December 10 to ensure adequate processing time.
  • Borrowers can request increases up to their maximum eligible loan amount for up to two years after their loan origination date, or until the funds are exhausted, whichever is soonest.
  • The SBA will accept and review reconsideration and appeal requests for COVID EIDL applications received on or before December 31 if the reconsideration/appeal is received within the timeframes in the regulation. This means six months from the date of decline for reconsiderations and 30 days from the date of reconsideration decline for appeals – unless funding is no longer available.

Eligible small businesses, nonprofits, and agricultural businesses in all U.S. states and territories can apply. See the SBA's EIDL webpage to learn more about eligibility and application requirements.

11/22/2021

Fed announces College Fed Challenge winners

The Federal Reserve Board announced on Friday that Pace University won the 18th annual national College Fed Challenge on Friday, a competition that encourages students to learn about the U.S. economy, monetary policymaking, and the role of the Federal Reserve System. The team, from New York, New York, represented the New York Federal Reserve District and included Fiona Waterman, Yuwei Liu, Kate Fong, Casey Cloutier, Christopher Beck, Gianni Campanaro (alternate), and Stephanie Ertel (alternate). The team's advisers were Gregory Colman and Mark Weinstock.

The College Fed Challenge was held virtually in 2021. Seventy-four schools from across the nation submitted video presentations or participated in local virtual competitions starting on October 8, 2021. College Fed Challenge is a team competition for undergraduate students. Teams analyze economic and financial conditions and formulate a monetary policy recommendation, modeling the Federal Open Market Committee.

Eighteen semi-finalist teams participated in question-and-answer sessions held during the week of November 8, and six finalists were selected and their presentations and questions and answers reviewed to determine the winners. The other national finalists were second place: University of Pennsylvania; third place: Dartmouth College; with honorable mentions for The George Washington University, University of California-Los Angeles (UCLA) and The University of Wisconsin-Madison.

11/19/2021

Agencies approve rule requiring computer-security incident notification

The Federal Reserve Board, OCC, and FDIC jointly announced yesterday their approval of a final rule to improve the sharing of information about cyber incidents that may affect the U.S. banking system. The final rule requires a banking organization to notify its primary federal regulator of any significant computer-security incident as soon as possible and no later than 36 hours after the banking organization determines that a cyber incident has occurred. Notification is required for incidents that have materially affected—or are reasonably likely to materially affect—the viability of a banking organization's operations, its ability to deliver banking products and services, or the stability of the financial sector.

In addition, the final rule requires a bank service provider to notify affected banking organization customers as soon as possible when the provider determines that it has experienced a computer-security incident that has materially affected or is reasonably likely to materially affect banking organization customers for four or more hours.

The rule becomes effective April 1, 2022. Compliance with the rule is required by May 1, 2022.

Publication update: Published at 86 FR 66424 on 11/23/2021.

11/19/2021

OCC enforcement actions

The Office of the Comptroller of the Currency has issued a list of enforcement actions taken in September and October 2021. Among the actions listed were:

  • a Consent Order to cease and desist issued to Cenlar FSB, Ewing, NJ, after the Comptroller found that the bank’s internal controls and risk management practices did not support the current risk profile and size of the Bank’s mortgage sub-servicing portfolio, which is an unsafe or unsound practice.
  • a previously announced Civil Money Penalty order issued to Trustmark National Bank, Jackson, MS
  • an order of prohibition and for payment of a $75,000 civil money penalty was issued to Derline Cunningham, former retail branch manager and officer of Citizens Bank, N.A., Providence, RI, for unspecified infractions
  • an order of prohibition was issued to Addisha Jackson, a former customer service representative at JPMorgan Chase Bank, N.A., Columbus, OH, for unspecified infractions
  • a formal agreement was entered into with The Federal Savings Bank, Chicago, IL, for unsafe or unsound practices, including those relating to: (i) risk management; (ii) the Bank’s consumer compliance program and violations of law, rule, or regulation, including those relating to the Real Estate Settlement Procedures Act, and the Truth in Lending Act; and (iii) compliance with the Bank Secrecy Act.

11/19/2021

Bureau reminder to debt collectors

The CFPB has emailed a reminder concerning a provision of Regulation F implementing the Fair Debt Collection Practices Act. Under the regulation, debt collectors who adopt and follow certain procedures can obtain a bona fide error defense from civil liability for unintentional violations of the prohibition against third-party communications when communicating by email or text message. For text message communications, one element of those procedures includes using a “complete and accurate database” to confirm that the consumer’s telephone number has not been re-assigned to another user.

The Rule’s commentary identifies the FCC’s Reassigned Numbers Database as a “complete and accurate database.” The FCC has now published that database, which is available at https://www.reassigned.us/. More information about the Reassigned Numbers Database is available at https://www.fcc.gov/reassigned-numbers-database.

11/19/2021

FinCEN notice on environment crimes and financial activity

On Thursday, FinCEN issued Notice FIN-2021-NTC4, "FinCEN Calls Attention to Environmental Crimes and Related Financial Activity," to call attention to an upward trend in environmental crimes and associated illicit financial activity.

FinCEN is highlighting this trend because of: (1) its strong association with corruption and transnational criminal organizations, two of FinCEN’s national anti-money laundering and countering the financing of terrorism (AML/CFT) priorities; (2) a need to enhance reporting and analysis of related illicit financial flows; and (3) environmental crimes’ contribution to the climate crisis, including threatening ecosystems, decreasing biodiversity, and increasing carbon dioxide in the atmosphere. The Notice provides financial institutions with specific suspicious activity report (SAR) filing instructions and highlights the likelihood of illicit financial activity related to several types of environmental crimes.

11/18/2021

SEC proposes amendments to proxy voting advice rules

The Securities and Exchange Commission on Wednesday voted to propose amendments to its rules governing proxy voting advice. The proposed amendments aim to address concerns expressed by investors and others that the current rules may impede and impair the timeliness and independence of proxy voting advice and subject proxy voting advice businesses to undue litigation risks and compliance costs.

The proposed amendments would rescind two rules applicable to proxy voting advice businesses that the Commission adopted in 2020. Specifically, the Commission is proposing to rescind conditions to the availability of two exemptions from the proxy rules’ informational and filing requirements on which proxy voting advice businesses often rely. Those conditions require that: (1) registrants that are the subject of proxy voting advice have such advice made available to them in a timely manner, and (2) clients of proxy voting advice businesses are provided with a means of becoming aware of any written responses by registrants to proxy voting advice. Investors and others have expressed concerns that these conditions will impose increased compliance costs on proxy voting advice businesses and impair the independence and timeliness of their proxy voting advice.

The proposed amendments also would rescind the 2020 changes made to the proxy rules’ liability provision. Although the changes were intended to make clear that proxy voting advice is subject to liability under the proxy rules, investors and others have expressed concerns that the 2020 changes have created confusion, increased proxy voting advice businesses’ litigation risks, and potentially impair the independence and quality of the proxy voting advice.

The proposal will have a 30-day public comment period following its publication in the Federal Register.

11/18/2021

SEC adopts new proxy card rules in contested director elections

The Securities and Exchange Commission voted Wednesday to adopt final rules requiring parties in a contested election to use universal proxy cards that include all director nominees presented for election at a shareholder meeting. The rule changes will give shareholders the ability to vote by proxy for their preferred combination of board candidates, similar to voting in person.

The final rules will require dissident shareholders and registrants to provide shareholders with a proxy card that includes the names of all registrant and dissident nominees. The rules will apply to all non-exempt solicitations for contested elections other than those involving registered investment companies and business development companies. The rules will require registrants and dissidents to provide each other with notice of the names of their nominees, establish a filing deadline and a minimum solicitation requirement for dissidents, and prescribe presentation and formatting requirements for universal proxy cards.

The final rules will be published in the Federal Register. To facilitate transition to the new rules, compliance with the rules related to universal proxy cards will be required for any shareholder meeting involving contested director election held after August 31, 2022.

11/18/2021

Bureau APOR problem fixed

The Bureau's publication of the fixed and adjustable Average Prime Offer Rates (APOR) for the week of November 15, 2021 was delayed.

The Bureau notes that these data are now available on the Bureau’s Rate Spread Calculator page at https://ffiec.cfpb.gov/tools/rate-spread.

11/18/2021

FHFA releases 2022 Scorecard

On Wednesday, the Federal Housing Finance Agency released the 2022 Scorecard for Fannie Mae, Freddie Mac (the Enterprises), and Common Securitization Solutions, LLC (CSS). The purpose of the 2022 Scorecard is to hold the Enterprises and CSS accountable for fulfilling their core mission requirements by promoting sustainable and equitable access to affordable housing and operating in a safe and sound manner.

The 2022 Scorecard focuses on specific Enterprise goals that address affordability, fair lending, and equity, in addition to promptly addressing examination and supervision findings, and ensuring sufficient liquidity to sustain the Enterprises through severe stress events. It also ensures that the Enterprises prioritize climate risk, as well as the principles of diversity and inclusion, throughout their decision-making processes.

11/17/2021

G.17 Industrial Production data

The Federal Reserve has released its G.17 Industrial Production and Capacity Utilization data for October 2021.

Industrial production rose 1.6 percent in October after falling 1.3 percent in September; about half of the gain in October reflected a recovery from the effects of Hurricane Ida. Manufacturing output increased 1.2 percent in October; excluding a large gain in the production of motor vehicles and parts, factory output moved up 0.6 percent. The output of utilities rose 1.2 percent, and mining output stepped up 4.1 percent.

At 101.6 percent of its 2017 average, total industrial production in October was 5.1 percent above its year-earlier level and at its highest reading since December 2019. In October, capacity utilization for the industrial sector increased 1.2 percentage points to 76.4 percent; even so, it was still 3.2 percentage points below its long-run (1972–2020) average.

11/17/2021

Fed enforcement actions

The Federal Reserve Board has announced two enforcement actions:

  • Industrial and Commercial Bank of China Ltd., Beijing, People's Republic of China; Industrial and Commercial Bank of China Ltd., New York Branch, New York, New York—Written Agreement dated November 4, 2021
  • Consent prohibition order against Laurence E. Bensignor, former executive vice president and general counsel of Eagle Bancorp, Inc., and EagleBank, Bethesda, Maryland—Unsafe and unsound banking practices

11/17/2021

CFPB Data Spotlight

The Consumer Financial Protection Bureau has released a Data Spotlight on "Suspicious Activity Reports on Elder Financial Exploitation."

In 2020, financial institutions such as banks, credit unions, and money transmitters filed 62,014 SARs involving suspected elder financial exploitation (EFE SARs). The total number of EFE SARs filed in 2020 was about 300 fewer than in 2019 (62,298). The relative consistency in the number of EFE SAR filings since 2018 differs from the trends in filings for all types of SARs, and trends in fraud reports submitted to the Federal Trade Commission’s Sentinel database. For example, between 2019 and 2020, general SAR filings grew from approximately 2.3 million to 2.5 million (8.8 percent). According to FTC’s Sentinel data, the number of fraud reports filed by adults age 60 and older with the FTC increased from 319,900 to 334,400 (4.5 percent) between 2019 and 2020.

The numbers and patterns for EFE SAR filings vary significantly by type of financial institution over time. Depository institutions such as banks and credit unions filed nearly 60 percent of all EFE SARs in 2020. While the share of EFE SAR filings by depository institutions has varied over time, the total number of EFE SAR filings by depository institutions has consistently increased from approximately 16,000 in 2014 to 36,500 in 2020.

While government payments were directly involved in a small share of EFE SARs overall, EFE SARs involving a government payment saw a notable increase between 2019 and 2020. The increase was particularly evident after June 2020, when government payments such as stimulus and unemployment benefits payments were issued to millions of older Americans. As a result, EFE SARs involving government payments accounted for a greater share of EFE SARs in 2020 (3 percent) than in 2019 (1 percent).

11/17/2021

CFPB requests input on detecting mortgage lending discrimination

The CFPB has announced its has issued a Request for Information (RFI) to seek input on rules implementing the Home Mortgage Disclosure Act (HMDA). The CFPB plans to review recent changes to the rule and evaluate their effectiveness. This evaluation will strengthen the CFPB’s ability to maintain a fair, competitive, and non-discriminatory mortgage market.

The CFPB is seeking comments on its plans to assess the effectiveness of the HMDA Rule. Specifically, the CFPB will focus on:

  • Institutional coverage and transactional coverage;
  • Data points;
  • Benefits of the new data and disclosure requirements; and
  • Operational and compliance costs.

The RFI will remain open for 60 days after publication in the Federal Register.

Publication and comment period update: Published at 86 FR 66220 on 11/22/2021, with a comment period ending in 60 days, on 01/21/2022.

11/17/2021

SBA tops $5 million in disaster assistance loans for wildfires

Director Tanya N. Garfield of the U.S. Small Business Administration’s Disaster Field Operations Center-West announced Tuesday that SBA has approved more than $5 million in federal disaster loans for California businesses and residents impacted by wildfires in Lassen, Nevada, Placer, Plumas, Tehama and Trinity counties that occurred July 14 through October 25, 2021. According to Garfield, SBA has approved $786,400 for businesses and $4,345,800 for residents to help rebuild and recover from this disaster.

Garfield said, “Although the deadline to apply for property damage loans has expired, small businesses and most private nonprofit organizations of any size may continue to apply for an Economic Injury Disaster Loan to help meet working capital needs caused by the disaster. Economic injury assistance is available regardless of whether the business or nonprofit organization suffered any property damage.”

11/17/2021

FinCEN Exchange on environmental crimes and related financial activity

On Tuesday, FinCEN convened a virtual FinCEN Exchange focused on identifying and combatting illicit financial flows associated with environmental crimes and related money laundering. Representatives from financial institutions, law enforcement, and Federal government agencies attended the session.

Topics discussed included illicit financial flows related to wildlife trafficking, illegal logging, illegal fishing, illegal mining, and waste and hazardous substances trafficking, and possible solutions for better understanding the related illicit flows.

FinCEN is focusing on environmental crimes because of an upward trend in these activities and their related financial flows; their strong association with two of FinCEN’s national anti-money laundering and countering the financing of terrorism (AML/CFT) priorities, specifically corruption and transnational criminal organizations; and their contribution to the climate and biodiversity crises. The Financial Action Task Force has estimated that global environmental crimes generate hundreds of billions in illicit proceeds annually. These crimes frequently and increasingly involve transnational organized crime and corruption, and are often associated with a variety of other crimes including money laundering, bribery, theft, forgery, tax evasion, fraud, human trafficking, and drug trafficking.

11/16/2021

FHFA FY 2021 Performance and Accountability Report

The Federal Housing Finance Agency on Monday released its annual Performance and Accountability Report, which details FHFA's activities as regulator of the Federal Home Loan Bank System and as regulator and conservator of Fannie Mae and Freddie Mac during fiscal year 2021.

For the thirteenth consecutive year, FHFA received an unmodified audit opinion on its FY 2021 financial statements from the U.S. Government Accountability Office. Included in the unmodified opinion, GAO noted no material weaknesses or significant deficiencies in FHFA's internal controls. GAO also found no instances of reportable noncompliance with the applicable laws and regulations it tested.

11/16/2021

Fed Detect Duplicate Treasury Check Service launched

Federal Reserve Financial Services has announced its FedDetect Duplicate Treasury Check Notifier Service, which will offer banks of first deposit early notice of potential duplicate U.S. Treasury checks processed by the Federal Reserve Banks on the current day or the previous 60 days. This includes reports on what may be duplicate deposits at multiple financial institutions and across mobile, ATM and teller deposit channels.

Financial institutions that participate in the FedDetect Duplicate Treasury Check Notifier Service will receive early morning and end-of-processing-day notices of potential duplicate Treasury checks. Each institution can use these reports to quickly see deposit information and available front-and-back images of potential duplicate items from their own institution and partial deposit information with available front-of-check images from other banks of first deposit. More information is available on the new FedDetect Service webpage .

11/16/2021

OFAC targets Nicaraguan ministry and officials

On Monday, Treasury announced that OFAC had designated the Public Ministry of Nicaragua (Ministerio Publico de Nicaragua) as well as nine officials of the Government of Nicaragua in response to the sham national elections orchestrated by President Daniel Ortega and Vice President Rosario Murillo. This action targets those who are repressing Nicaraguans for exercising their human rights and fundamental freedoms.

Monday’s action, taken pursuant to Executive Order 13851, “Blocking Property of Certain Persons Contributing to the Situation in Nicaragua,” and the Nicaragua Human Rights and Anticorruption Act of 2018 (NHRAA), now known as the Nicaragua Investment Conditionality Act of 2018 (NICA), is intended to highlight the anti-democratic actions that the Ortega regime has undertaken to alter and corrupt the election process in Nicaragua and solidify the power of Ortega, Murillo and their inner circle.

For the names of the nine designated officials and additional identification information on them and the targeted ministry, see the BankersOnline OFAC Update for November 15, 2021.

11/15/2021

FTC requests comment on draft of strategic plan

The Federal Trade Commission has released a preliminary draft Strategic Plan for Fiscal Years 2022–2026 for public review and comment. Every four years, government agencies are required to submit an updated strategic plan that presents strategic goals and objectives for the next five years and describes how the agency will measure success in these areas. The FTC’s last updated strategic plan was prepared in FY 2018, and the current draft tracks closely to that iteration. The FTC welcomes feedback on how the draft plan could be adjusted to reflect the agency’s reinvigorated approach to addressing harms to American consumers, workers, and honest businesses. Public comments on the draft plan may be submitted until November 30, 2021.

11/15/2021

OFAC sanctions Eritrean entities and individuals

On Friday, OFAC designated four entities and two individuals under the authority of Executive Order 14046 in response to the growing humanitarian and human rights crisis and expanding military conflict in Ethiopia. The individuals and entities designated today are the Eritrean Defense Force, the People’s Front for Democracy and Justice, Abraha Kassa Nemariam, Hidri Trust, Hagos Ghebrehiwet W Kidan, and Red Sea Trading Corporation.

As a result of today’s action, all property and interests in property of the persons named above that are in the United States, or in the possession or control of U.S. persons, are blocked and must be reported to OFAC. No entity shall be blocked pursuant to E.O. 14046 solely because it is owned in whole or in part, directly or indirectly, by one or more sanctioned persons, unless the entity is itself a sanctioned person.

For identification information on those designated, as well as information on a number of designation removals, see BankersOnline's November 12, 2021, OFAC Update.

11/15/2021

IRS reminder about Child Tax Credit advances

The Internal Revenue Service announced Friday that millions of American families will soon receive their advance Child Tax Credit payment for the month of November. Low-income families who are not getting payments and have not filed a tax return can still get one, but they must sign up on IRS.gov by 11:59 pm Eastern Time on Monday, November 15 (today).

This fifth batch of advance monthly payments, totaling about $15 billion, will reach about 36 million families across the country today or shortly thereafter. The majority of payments are being made by direct deposit.

11/15/2021

CFPB sues pawn lenders for cheating military families

The CFPB on Friday announced it has filed a lawsuit in a Texas federal district court against FirstCash, Inc. and Cash America West, Inc. The CFPB alleges that the two companies violated the Military Lending Act (MLA) by charging higher than the allowable 36% annual percentage rate on pawn loans to active-duty servicemembers and their dependents. The CFPB also alleges that FirstCash violated a 2013 CFPB order against its predecessor company prohibiting MLA violations. The CFPB is seeking an injunction, redress for affected borrowers, and a civil money penalty.

FirstCash, Inc. is a non-bank corporation operating out of Fort Worth, Texas. FirstCash and its wholly owned subsidiaries operate more than 1,000 pawnshops throughout the U.S. FirstCash is a publicly traded firm with a current market capitalization of about $3.5 billion. Cash America West, Inc. is a wholly owned subsidiary of FirstCash that operates pawn stores in Arizona, Nevada, Utah, and Washington.

The CFPB alleges that between June 2017 and May 2021, FirstCash and Cash America West violated the MLA by making more than 3,600 pawn loans from their Arizona, Nevada, Utah, and Washington stores with an annual percentage rate above the 36% allowed by the MLA. The unlawful loans had APRs that frequently exceeded 200%. The CFPB also alleges that the loan contracts violated the MLA by requiring borrowers to sign away their ability to sue and by failing to make all required loan disclosures. These 3,600 loans are from only a limited period for which the Bureau currently has transactional data, and the stores from which they originated make up only about 10% of FirstCash’s nationwide pawn-loan operations. Accordingly, the CFPB alleges that since October 3, 2016, FirstCash has, together with Cash America West and other wholly owned subsidiaries, made additional pawn loans in violation of the MLA from stores in these and other states.

In 2013, the Bureau ordered Cash America International, Inc. to halt its misconduct against military families, prohibiting Cash America and its successors from violating the MLA. FirstCash is a successor to Cash America and therefore subject to the 2013 order. The Bureau alleges that FirstCash’s violations of the MLA violated the Bureau’s 2013 order.

11/12/2021

HUD grants $74M in COVID relief to tribal communities

On Wednesday, HUD announced more than $73.9 million in Indian Community Block Grant-American Rescue Plan (ICDBG-ARP) grants to 68 Tribal communities. These funds to tribes will help protect the health and safety of their communities, particularly low-and moderate-income individuals and families, by expanding access to safe housing, a suitable living environment, and economic opportunities.

11/12/2021

FinCEN Exchange held

On Tuesday, FinCEN convened a virtual FinCEN Exchange with members of the financial industry and law enforcement to discuss FinCEN’s analysis of suspicious activity reporting (SAR) with a transactional nexus to Alabama, Florida, Georgia, Mississippi, and South Carolina. Topics of discussion included an analysis of certain Bank Secrecy Act (BSA) filing statistics for SARs and an analysis of SAR filings related to recent FinCEN advisories.

FinCEN Exchanges support one of FinCEN’s highest priorities—to strengthen public-private partnerships to identify and mitigate threats in order to safeguard our national security and protect communities and citizens from harm. Engagement on specific topics, trends, and typologies between industry, law enforcement, and FinCEN can enhance the value of BSA reporting. Such reporting can assist law enforcement in identifying and addressing potential criminal methodologies, support ongoing investigations, and promote efficient and effective reporting of actionable information by financial institutions.

11/12/2021

Fair Lending interagency webinar

The Federal Reserve Bank of Philadelphia has sent out invitations to the Outlook Live 2021 Fair Lending Interagency Webinar, to be held on December 7, 2021, from 2:00 to 3:30 p.m. Eastern time. Speakers will represent eight federal agencies:

  • Consumer Financial Protection Bureau
  • Department of Housing and Urban Development
  • Department of Justice
  • Federal Deposit Insurance Corporation
  • Federal Housing Finance Agency
  • Federal Reserve Board
  • National Credit Union Administration
  • Office of the Comptroller of the Currency

Topics to be discussed include:

  • Recent Fair Lending Guidance Documents
  • Analyzing HMDA Data
  • Enterprise Fair Lending Data
  • Fintech Risk Management
  • Redlining Self-Assessments
  • Redlining & Marketing
  • DOJ Redlining Initiative and Recent Enforcement
  • JP Morgan Chase Conciliation Agreement

Online registration is required, and is now open.

11/12/2021

FFIEC to send 'Announcements'

The Federal Financial Institutions Examination Council (FFIEC) on Wednesday launched “FFIEC Announcements,” email notifications providing relevant and timely information designed specifically for examiners and practitioners within the financial services sector.

FFIEC Announcements will be distributed to the FFIEC's email subscribers notifying them of updates to the FFIEC's website and InfoBases.

11/12/2021

OFAC targets corrupt Cambodian military officials

On Wednesday, the Treasury Department announced that OFAC has sanctioned two Cambodian government officials, Chau Phirun (Chau) and Tea Vinh (Tea), for their roles in corruption in Cambodia. These individuals were designated pursuant to Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world. The designations were complemented by the U.S. Department of State’s announcement of visa restrictions under Section 7031(c) of the FY 2021 Department of State, Foreign Operations, and Related Programs Appropriations Act on Chau and Tea, and their eligible immediate family members, due to their involvement in significant corruption.

See the BankersOnline OFAC Update for November 10, 2021, for identification information on Chau and Tea.

OFAC has also published a Cambodia Business Advisory on High-Risk Investments and Interactions.

11/12/2021

Mortgage servicing supervisory flexibility ending

The CFPB, OCC, Board of Governors, OCC, FDIC, NCUA and state financial regulators on Wednesday, November 10, 2021, issued an updated "Joint Statement on Supervisory and Enforcement Practices Regarding the Mortgage Servicing Rules in Response to the Continuing COVID-19 Pandemic and CARES Act."

The temporary supervisory and enforcement flexibility announced in the original (April 2020) joint statement no longer applies, and the agencies will apply their respective supervisory and enforcement authorities, when appropriate, to address any noncompliance or violations of the Regulation X mortgage servicing rules that occur after the date of this statement. These rules include "Protections for Borrowers Affected by the COVID-19 Emergency Under the Real Estate Settlement Procedures Act (RESPA)," Regulation X (86 Fed. Reg. 34848), which became effective on August 31, 2021.

The new joint statement closes with this paragraph—

  • "The agencies recognize the ongoing challenges faced by mortgage servicers and their efforts to assist customers and members affected by the ongoing COVID-19 pandemic. The agencies continue to encourage mortgage servicers to engage in these efforts. The agencies will consider, when appropriate, the specific impact of servicers’ challenges that arise due to the COVID-19 pandemic and take those issues in account when considering any supervisory and enforcement actions. As part of their considerations, the agencies will factor in the time it takes to make operational adjustments in connection with this joint statement."

Related links:

11/10/2021

Call Report revision

The FDIC has issued FIL-72-2021 jointly with the Federal Reserve Board and the OCC to announce that the agencies published, at 86 FR 60965 in the November 4, 2021, Federal Register, a notice that the agencies are adding to Call Reports a new item related to the standardized approach for counterparty risk (SA-CCR).

The agencies are deferring proposed changes to the instructions for reporting deferred tax assets. They plan to submit to the Office of Management and Budget a request to approve the revision and extension of these information collections, and again invite comment on the renewal. Comments are due by December 6, 2021.

11/10/2021

FHA revises single-family home loan programs

The Federal Housing Administration has announced the publication of significantly revised and enhanced policies under its Single-Family Title 1 Manufactured Home Loan Program for lenders to provide loans for the financing of manufactured homes, including those titled as personal property, and the lots on which these homes will reside. The enhanced policies provide updated guidance that will make the program easier to understand and use for lenders, while providing expanded eligibility requirements for loan financing that are consistent with the criteria for income and property valuations used in real-estate mortgage financing.

With the updates, Title I Manufactured Home Loan Program requirements now include features that remove financing barriers and expand access to credit, including:

  • Enhanced value determinations that use a sales comparison approach, allow for qualified FHA Roster Appraisers to perform valuations;
  • Expanded allowable income sources for borrower qualification that are comparable to FHA’s Title II mortgage insurance programs; and
  • Additional flexibilities which include calculating student loan debt consistent with FHA’s Title II mortgage insurance programs and allowing the use of gift funds from eligible sources.

In addition to Title I Manufactured Home Loan Program updates, FHA also published updates to the requirements for its Title I Property Improvement Loan Program to make the requirements of this program consistent with current lending practices. The Title I Property Improvement Loan Program is designed to help homeowners finance improvements to improve the livability or utility of a property through a secured or unsecured loan.

Both the Title I Manufactured Home Loan Program and Title I Property Improvement Loan Program updates may be implemented by lenders immediately but must be implemented for loans closed on and after May 9, 2022.

11/10/2021

UAE bank cited for violations of Sudanese sanctions

The Office of Foreign Assets Control and the Federal Reserve Board have cited Mashreqbank psc for violations of the now-repealed Sudanese Sanctions Regulations (SSR), as part of a global settlement between Mashreqbank, the New York State Department of Financial Services (DFS) and the Federal Reserve Board of Governors. The violations related to Mashreqbank’s processing of payments through U.S. financial institutions that related to U.S. dollar transfers from accounts of Sudanese banks held outside the United States. Mashreqbank psc is a commercial bank headquartered in Dubai, United Arab Emirates, that maintains a branch in New York, New York.

OFAC issued a Finding of Violation to Mashreqbank. rather than a civil money penalty order, in part because Mashreqbank voluntarily entered into a retroactive statute of limitations waiver agreement, without which OFAC would have been time-barred from charging the violations.

The Federal Reserve Board on Tuesday announced it has issued a consent cease and desist order to Mashreqbank.

11/10/2021

$36M from HUD for housing grants

The Department of Housing and Urban Development has announced that more than 250 communities across the country will be able to increase the economic impact of their local community development and affordable housing programs for low- and moderate-income persons through $36 million in HUD "capacity-building" grants.

The funds awarded will support three national organizations and are ultimately expected to produce approximately 8,000 units of affordable housing nationwide and stimulate nearly $150 million in total investment. Local Initiatives Support Corporation (LISC); Enterprise Community Partners, Inc.; and Habitat for Humanity International were selected to distribute the funds to local initiatives that support affordable housing and community development.

11/09/2021

Payment processor banned by FTC

The Federal Trade Commission has issued an order permanently banning a payment processor that facilitated a fraudulent student loan debt relief scheme from processing debt relief payments. The order also requires the company and its owner to surrender $500,000 to the FTC for consumer redress.

A complaint filed by FTC alleged Automatic Funds Transfer Services, Inc. (AFTS) and its owner, Eric Johnson, processed at least $31 million in consumer payments for a fraudulent student loan debt relief scheme sued by the FTC in 2019. The debt relief scheme used numerous names, including The Student Loan Group (SLG).

AFTS and Johnson processed payments from tens of thousands of consumers deceived by SLG into paying illegal upfront fees with false promises to lower the consumers’ monthly student loan payments. The complaint cites correspondence showing that AFTS and Johnson were aware of numerous issues with the scheme. The FTC alleges that the company and Johnson received complaints from, among others, consumers and banks; were aware that SLG had high return rates and was collecting illegal upfront fees from consumers; and knew that SLG kept changing company and brand names to, among other reasons, mitigate negative publicity. Despite numerous warning signs, AFTS and Johnson continued processing consumer payments for SLG right until the scheme was ultimately shut down following an enforcement action by the FTC.

The settlement permanently prohibits AFTS and Johnson from processing payments for debt relief or student loan companies. They will also be prohibited from processing payments indirectly for any merchant that does not have a signed contract with AFTS, and will be required to apply enhanced screening and monitoring of certain high risk clients to ensure such clients are not operating illegally. The monetary judgment of $27,584,969 is largely suspended due to an inability to pay. AFTS and Johnson will be required to surrender $500,000 to the FTC, and if they are found to have misrepresented their financial status, the full amount of the judgment would be immediately due.

Press release

11/09/2021

US travel permitted for fully vaccinated foreign nationals

The Department of Homeland Security has announced that, starting November 8, 2021, foreign nationals who have been fully vaccinated against COVID-19 and have appropriate documentation will be permitted to enter the United States via land ports of entry and ferry terminals for non-essential reasons such as tourism. The Department reminds these travelers to be prepared to (1) provide proof of their COVID-19 vaccination, and (2) verbally attest to their reason for travel and COVID-19 vaccination status during a border inspection.

11/09/2021

Hsu discusses climate change risk

On Monday, Acting Comptroller of the Currency Michael J. Hsu discussed climate change risk at OCC Headquarters. His remarks highlighted five questions that large bank boards of directors should ask to promote and accelerate improvements in climate risk management practices at their banks:

  1. What is our overall exposure to climate change?
  2. Which counterparties, sectors, or locales warrant our heightened attention and focus?
  3. How exposed are we to a carbon tax?
  4. How vulnerable are our data centers and other critical services to extreme weather?
  5. What can we do to position ourselves to seize opportunities from climate change?

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